Learn how to Track Business Expenses. You won’t recognize the importance of tracking your business expenses until you noticed that something doesn’t add up in your books. You’ll be left to wonder where that amount of money goes. And believe me, start-up and small businesses usually fail because of cash flow problems.
Tracking your business expenses doesn’t just let you see your business’ financial standing. It also allows you to devise strategies for your business by understanding what’s working and not. Also, it helps you predict upcoming expenses, and more importantly, map out your cash flow.
But how do businesses track their expenses? If you asked that question too then you are really into reaching your business goals. You want to learn from those who succeeded. Without further ado, here are tips and ideas on how to track business expenses:
Create a Bank Account
- Personal and business money should be separate. By creating a bank account solely for business purposes, it will prevent you from spending business money for personal purposes. Bank transactions are recorded, which makes it easy to track expenses. Also, pro-tip, connect this bank account to your accounting software (if you have one) to lessen your workload and make it easier to track expenses.
Notate Expenses Right Away
- Use an app (like the calendar or a sheet) on your phone or even a notebook to do this. As soon as you spend your business money on business purposes, write it right away with the date. You can also use this to set upcoming expenses. Then record it in your sheet or accounting software.
Use a Software or an App
- Things have been made easier by technology, which includes tracking your business expenses. Most accounting software has a function to track business expenses. For apps, here are examples of the great ones for this purpose: Foreceipt, Certify, Receiptmate, Shoeboxed, and Expensify.
- Never throw receipts especially if it was from a business expense. But do scan hard copies and compile it digitally in a secured server or storage. This will act as a record of every expense. However, don’t just rely on this when tracking expenses. Use this as a back-up if your records don’t add up.
Record All Expenses for Business Trip
- As long as the business used money, all things where you spent it should be recorded. From the plane ticket, hotel, and even the dinner.
Hire a BookKeeper
- You should consider hiring a bookkeeper especially if your business is growing. That person will do the tracking for you and everything about bookkeeping. They can range from $20 to $50 per hour.